Which of the following costs are irrelevant for a special order which will allow an organization to utilize some of its present idle capacity?

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When considering a special order that will enable a company to make use of currently idle capacity Which of the following costs is irrelevant?
Which of the following costs are not considered in differential analysis for a make or buy decision?
Which of the following costs would continue to be incurred even if a segment?

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Question	Answer
A variance can best be described as:	differences between planned results and actual results.
Which about variance is (are) false? (A) In general and holding all other things constant, an unfavorable variance decreases operating profits. (B) A favorable variance is not always good, and an unfavorable variance is not always bad.	Neither A nor B is false.
The difference between operating profits in the master budget and operating profits in the flexible budget is called:	sales activity variance.
The sales price variance is the difference between the actual sales revenues and the:	budgeted selling price multiplied by the actual number of units sold.
Which department is customarily held responsible for an unfavorable materials quantity variance?	Production
Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance?	The mix of workers assigned to the particular job was heavily weighted towards the use of higher paid experienced individuals.
The variable overhead price variance is due to:	both price and efficiency items.
The production volume variance is computed by the difference between the:	budget at actual levels of activity reached and fixed overhead applied.
Which of the following will not result in an increase in the residual income, assuming other factors remain constant?	An increase in the minimum required rate of return.
All other things the same, which of the following would increase residual income?	Decrease in average operating assets.
How will increases in the following items affect return on investment (ROI)?	Option A: (Decrease/Decrease)
A manager can always increase his/her return on investment (ROI) by:	increasing the operating profit margin.
The asset turnover is a measure (ratio) of an investment center's ability to:	generate sales.
Which of the following statements does not represent a limitation of using return on investment (ROI) for measuring and evaluating performance?	ROI cannot be used to compare divisions of different sizes.
Which of the following statements is true regarding decentralization?	Decentralization allows managers to receive on-the-job training in decision making.
Which of the following three statements are correct? I. A profit center has control over both cost and revenue. II. An investment center has control over invested funds, but not over costs and revenue. III. A cost center has no control over sales.	Only I and III.
Assets invested in a responsibility center are included in a performance report of a:	Option D: (No/Yes)
Cost allocation of shared facilities cost is intended to remind managers of:	Both the cost and value of using shared resources.
The Sarbanes-Oxley Act of 2002 requires that management of publicly traded companies:	report on the adequacy of the company's internal controls over financial reporting.
Internal controls include all of the following except:	using contingent compensation plans.
If a budgeted activity base is used as the base in cost allocation, each department's cost allocation will be predictable, and not influenced by the:	actual usage in other departments.
Which of the following costs are irrelevant for a special order that will allow an organization to utilize some of its present idle capacity?	Unavoidable fixed overhead.
Which of the following costs are not considered in a differential analysis for a make-or-buy decision?	Fixed overhead that will continue if the item is purchased.
Which of the following statements about the theory of constraints is (are) true? (A) The theory of constraints focuses on determining the optimal product mix when one or more resources restrict the attainment of a goal or objective.	Both A and B are true.
Which of the following statements about the theory of constraints is (are) true? (B) The theory of constraints focuses on maximizing the rate of throughput contribution while minimizing investment and other operating costs.	Both A and B are true.
Differential costs are: (CMA adapted)	the difference in total costs that result from selecting one choice instead of another.
Which of the following costs would continue to be incurred even if a segment is eliminated?	Common fixed costs
If there is excess capacity, the minimum acceptable price for a special order must cover:	variable and incremental fixed costs associated with the special order.
Which of the following statements regarding special orders is (are) false? (B) The differential analysis approach to pricing for special orders will always lead to under pricing in the long-run because fixed costs are not included in the analysis.	Only B.
The opportunity cost of making a component part in a factory with no excess capacity is the: (CMA adapted)	net benefit foregone from the best alternative use of the capacity required.

When considering a special order that will enable a company to make use of currently idle capacity Which of the following costs is irrelevant?

Answer and Explanation: The correct answer is B) Depreciation.

Which of the following costs are not considered in differential analysis for a make or buy decision?

Which of the following costs are not considered in a differential analysis for a make-or-buy decision? Fixed overhead that will continue if the item is purchased.

Which of the following costs would continue to be incurred even if a segment?

Which of the following costs would continue to be incurred even if a segment is eliminated? Common fixed costs. Common fixed costs continue even though a segment is eliminated.

Which of the following costs are irrelevant for a special order which will allow an organization to utilize some of its present idle capacity?

When considering a special order that will enable a company to make use of currently idle capacity Which of the following costs is irrelevant?

Which of the following costs are not considered in differential analysis for a make or buy decision?

Which of the following costs would continue to be incurred even if a segment?

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